Foreign Direct Investments (FDIs) have significantly improved in the first half of 2024, with $304 million invested in Nigeria’s telecom industry.
The National Bureau of Statistics (NBS) reports available to BrandSpur telecom and IT news desk, show that the industry has more than doubled its capital importation of $134.75 million between the half-year record and the year 2023. The NBS data, reveals the industry brought in $191.5% of capital in the first quarter of this year, a significant rise of 769% over the $22.05 million received in Q1 2023.
The report also showed that, in Q2 2024, FDIs in the industry totaled $113.4 million, a considerable 339% increase over the $25.81 capital influx recorded during the same period the previous year, although less than the inflow recorded in the previous quarter.
However, there is now little reason for telecom industry stakeholders to celebrate the development. They pointed out that the government’s policy whirlwinds are unlikely to maintain documented progress and restore the losses of previous years in terms of the industry. To promote additional investments in the telecom industry, Gbolahan Awonuga, the Executive Secretary of the Association of Licensed Telecommunications Companies of Nigeria (ALTON), believes that the problem of currency volatility remains a significant one.
According to the Executive Secretary: “Whatever we are seeing now may be a flash in the pan until the industry challenges are addressed. Issues of Right of Way charges are still there, likewise multiple taxation and above all the forex instability that continues to affect the operators’ ability to import equipment.”
Additionally, according to telecom industry consultant Wale Babalola, investments made in the first half of the year are still insufficient to fuel the sector’s present development.
He stated: “Yes, it’s good that the sector is doing better than last year and to an extent, the last two years, but that is not enough to bridge the existing infrastructure in the sector.
“Besides, many investors are still watching to see how the government will handle several policy issues still hanging. One of which is tariff regulation. Any country that wants to attract investors should be able to assure returns on investments.
“I don’t think that exists right now in the telecom market with the regulator preventing the telecom operators from reviewing their pricing to adjust for inflation and the rising operating costs,” he added.
The current increase in foreign direct investment (FDI) follows years of steadily declining investment, despite an infrastructure gap that is growing and will require billions of dollars to close.
